Ascent Capital Group Announces Financial Results for the Three Months and Full Year Ended December 31, 2014; Announces Acquisition of LiveWatch Security, LLC

ENGLEWOOD, Colo.--(BUSINESS WIRE)--
Ascent Capital Group, Inc. ("Ascent" or the "Company") (Nasdaq:ASCMA)
has reported results for the three months and full year ended December
31, 2014. Ascent is a holding company that owns Monitronics
International, Inc. ("Monitronics"), the nation's second largest home
security alarm monitoring company.

Headquartered in Dallas, Texas, Monitronics provides security alarm
monitoring services to more than one million residential and commercial
customers as of December 31, 2014. Monitronics' long-term monitoring
contracts provide high margin recurring revenue that results in
predictable and stable cash flow.

Highlights1:

Ascent's net revenue for the three and twelve months ended December
31, 2014 increased 2.3% and 19.6%, respectively

Ascent's Adjusted EBITDA2 for the three and twelve months
ended December 31, 2014 increased 3.1% and 16.5%, respectively

Monitronics Adjusted EBITDA3 for the three and twelve
months ended December 31, 2014 increased 3.4% and 18.7%

Monitronics RMR as of December 31, 2014 increased 3.1% to $44.1
million

Average RMR per subscriber increased 1.8% to $41.64

Monitronics has acquired LiveWatch Security, LLC, a Do-It-Yourself
("DIY") home security provider offering interactive and home
automation services, for approximately $67 million

LiveWatch services over 32,000 accounts nationwide and has over
$900,000 of recurring monthly revenue

Ascent Chairman and Chief Executive Officer Bill Fitzgerald stated,
"Monitronics delivered another year of solid operating performance in
2014, with strong year over year growth in revenue and Adjusted EBITDA.

"In an effort to continue expanding Monitronics' service offerings and
distribution channels, we are pleased to announce the acquisition of
LiveWatch Security, a significant player in the rapidly growing DIY home
security space. This acquisition will allow Monitronics to diversify its
service offerings with entry into the developing and complementary DIY
home service category. In addition to bringing an additional 32,000
customer accounts to the Monitronics platform, it will also provide a
very robust production engine that is expected to continue generating a
high volume of new accounts and RMR."

Mike Haislip, President and Chief Executive Officer of Monitronics,
said, "Monitronics' performance in the fourth quarter and 2014 reflects
our disciplined approach to managing our operations. We delivered solid
revenue and Adjusted EBITDA growth in 2014. As previously predicted,
attrition levels increased to 12.9%, largely due to a significant prior
bulk acquisition that has resulted in a higher percentage of accounts
reaching the end of their initial contract terms. Our predictive data
continues to indicate that this bulk purchase will lead to a modest
incremental increase in attrition through the first half of 2015 before
seeing it moderate in the second half of the year. Overall, we were very
pleased with our operating performance for the year."

LiveWatch Security, LLC

On February 23rd, Monitronics acquired LiveWatch Security,
LLC, a Do-It-Yourself ("DIY") home security provider offering
interactive and home automation services for approximately $67 million,
which includes $6 million of retention bonuses to be paid on the second
anniversary of the closing.

With over $900,000 of recurring monthly revenue, LiveWatch provides
professionally monitored security system services to over 32,000
customers across all fifty states and Puerto Rico.

In conjunction with this transaction, Monitronics has expanded its
revolving credit facility by $90 million. The transaction was financed
with debt under the expanded revolver and cash from Ascent.

About the acquisition Monitronics Chief Executive Officer, Michael
Haislip, commented, "We are excited to have acquired LiveWatch, an
established player in the rapidly expanding DIY space, a compelling
channel that we have long been interested in entering. LiveWatch
provides Monitronics with innovative and diversified account generation
potential that, over time, can be expanded into adjacent product and
service offerings beyond traditional home security monitoring."

Brad Morehead, CEO of LiveWatch, added, "The home security industry is
experiencing a rapid technological evolution and we believe that we are
at the forefront of that change. Partnering with Monitronics, a
well-respected industry leader, will enable LiveWatch to accelerate its
innovation, leverage scale opportunities, and enhance the overall
customer experience."

LiveWatch will operate as a standalone subsidiary of Monitronics.

Three and Twelve Months Ended December 31, 2014 Results

Ascent Capital Group, Inc.

For the three months ended December 31, 2014, Ascent reported net
revenue of $135.9 million, an increase of 2.3% compared to $132.8
million for the three months ended December 31, 2013. For the twelve
months ended December 31, 2014 net revenue increased 19.6% to $539.4
million. The increase in net revenue for the three and twelve month time
periods is primarily attributable to increases in Monitronics'
subscriber accounts and average RMR per subscriber.

Ascent's total cost of services for the three and twelve months ended
December 31, 2014 increased 7.0% and 27.8% to $24.8 million and $94.7
million, respectively. The increase is primarily attributable to
Monitronics' subscriber growth over the last twelve months, as well as
increases in the number of HomeTouch customers and service costs.
Service costs for the year ended December 31, 2014 also included $1.1
million of non-recurring costs related to the Radio Conversion Program,
as described in more detail below.

Selling, general & administrative ("SG&A") expenses for the three months
ended December 31, 2014 decreased 8.9% to $24.5 million, and increased
11.0% to $102.1 million for the full year 2014. Decreased SG&A costs for
the three months ended December 31, 2014, are attributable to
Monitronics' elimination of duplicate costs related to the Security
Networks acquisition that closed in August 2013. The increase for the
twelve month period is a result of higher Monitronics SG&A costs, which
are attributable to subscriber growth over the last twelve months and
redundant staffing through April 2014, when the transition of Security
networks operations from Florida to Texas was completed.

Ascent's Adjusted EBITDA increased 3.1% to $88.9 million during the
quarter and 16.5% to $354.8 million for the twelve months ended December
31, 2014. This increase is primarily due to revenue and subscriber
growth at Monitronics.

Ascent reported net losses from continuing operations for the three and
twelve months ended December 31, 2014 of $6.6 million and $37.4 million,
respectively, compared to net losses of $16.5 million and $21.6 million
for the same periods in 2013.

Monitronics International, Inc.

For the three and twelve months ended December 31, 2014, Monitronics
reported net revenue of $135.9 million and $539.4 million, increases of
2.3% and 19.6%, respectively. The increase in net revenue is
attributable to the growth in the number of subscriber accounts and the
increase in average RMR per subscriber to $41.64. The growth in
subscriber accounts reflects the acquisition of over 200,000 accounts
from Security Networks in August 2013 and the acquisition of over
145,000 accounts through Monitronics' authorized dealer program
subsequent to December 31, 2013. Net revenue for the year ended December
31, 2013 also reflects the negative impact of an approximate $2,715,000
fair value adjustment that reduced deferred revenue acquired in the
Security Networks Acquisition.

Monitronics' total cost of services for the three and twelve months
ended December 31, 2014 increased 7.0% to $24.8 million and 27.8% to
$94.7 million, respectively. The increase is primarily attributable to
subscriber growth as explained above, as well as increases in the number
of HomeTouch customers and service costs. HomeTouch services include
home automation services monitored across the cellular network. Service
cost for the year ended December 31, 2014 included $1.1 million of labor
and materials expense incurred in relation to the Radio Conversion
Program, which was implemented in 2014 to upgrade subscribers' alarm
monitoring systems that communicate across certain 2G networks that are
expected to be discontinued at the end of 2016.

Monitronics' SG&A costs decreased 8.2% to $21.3 million for the three
months ended December 31, 2014 and increased 14.0% to $87.9 million for
the full year. The decreased SG&A costs for the three months ended
December 31, 2014 are attributable to the elimination of duplicate costs
from the Security Networks acquisition, which include reduced payroll
and facility costs. Additionally, SG&A costs for the three months ended
December 31, 2013 included $729,000 of professional fees incurred in
relation to the Security Networks integration. For the twelve months
ended December 31, 2014, the increase is attributable to subscriber
growth over the last twelve months. In addition and as noted above,
Monitronics incurred redundant staffing and operating costs at its
Dallas headquarters in advance of transitioning Security Networks'
operations from Florida to Texas, which was completed in April 2014.

Monitronics' Adjusted EBITDA for the three months ended December 31,
2014 was $90.8 million, an increase of 3.4% over the three months. For
the twelve months ended December 31, 2014, Monitronics' Adjusted EBITDA
increased 18.7% to $362.2 million. The increase is primarily due to
revenue growth. Monitronics' Adjusted EBITDA as a percentage of revenue
was 66.8% in the quarter ended December 31, 2014, compared to 66.1% for
the three months ended December 31, 2013. Monitronics' Adjusted EBITDA
as a percentage of revenue for the twelve months ended December 31, 2014
totaled 67.1%, compared to 67.7% for the year-ago period.

Monitronics reported net losses for the three and twelve months ended
December 31, 2014 of $5.0 million and $29.7 million, respectively,
compared to net losses of $14.1 million and $16.7 million for the same
periods in 2013.

The table below presents subscriber data for the twelve months ended
December 31, 2014 and 2013:

Includes canceled accounts that are contractually guaranteed to be
refunded from holdback.

(b)

Includes an increase of 1,503 subscriber accounts associated with
multi-site subscribers that were considered single accounts prior to
the completion of the Security Networks integration in April 2014.

(c)

Includes 2,046 subscriber accounts that were proactively canceled
during 2013 because they were active with both Monitronics and
Security Networks.

(d)

The RMR of canceled accounts follows the same definition as
subscriber unit cancellations. RMR attrition is defined as the RMR
of canceled accounts in a given period, adjusted for the impact of
price increases or decreases in a given period, divided by the
weighted average RMR for that period.

During the three months ended December 31, 2014 and 2013, Monitronics
acquired 37,998 subscriber accounts and 37,341 subscriber accounts,
respectively. During the years ended December 31, 2014 and 2013,
Monitronics acquired 156,225 and 150,643 subscriber accounts,
respectively, without giving effect to the Security Networks Acquisition
which included 203,898 accounts acquired at the completion of the
acquisition in August of 2013.

Ascent Liquidity and Capital Resources

At December 31, 2014, on a consolidated basis, Ascent had $135.2 million
of cash, cash equivalents and marketable securities. A portion of these
assets may be used to decrease debt obligations or fund stock
repurchases, strategic acquisitions or investment opportunities.

During the twelve months ended December 31, 2014, Monitronics used cash
of $268.2 million to fund subscriber account acquisitions, net of
holdback and guarantee obligations.

At December 31, 2014, the existing long-term debt principal balance of
$1.7 billion includes Monitronics' Senior Notes, Credit Facility and
Credit Facility revolver and Ascent's Convertible Notes. The Convertible
Notes have an outstanding principal balance of $103.5 million as of
December 31, 2014 and mature on July 15, 2020. Monitronics' Senior Notes
have an outstanding principal balance of $585.0 million as of December
31, 2014 and mature on April 1, 2020. The Credit Facility term loans
have an outstanding principal balance of $898.3 million as of December
31, 2014 and require principal payments of approximately $2.3 million
per quarter with the remaining outstanding balance becoming due on March
23, 2018. The Credit Facility revolver has an outstanding balance of
$70.5 million as of December 31, 2014 and becomes due on December 22,
2017.

Conference Call

Ascent will host a call today, Thursday, February 26, 2015 at 5:00 P.M.
ET. To access the call please dial (888) 462-5915 from the United
States, or (760) 666-3831 from outside the U.S. The conference call I.D.
number is 80046849. Participants should dial in 5 to 10 minutes before
the scheduled time and must be on a touch-tone telephone to ask
questions.

A replay of the call can be accessed through April 26, 2015 by dialing
(800) 585-8367 from the U.S., or (404) 537-3406 from outside the U.S.
The conference call I.D. number is 80046849.

This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
including statements about business strategies, market potential,
consumer demand for interactive and home automation services, the
anticipated benefits of the LiveWatch acquisition, future financial
prospects, and other matters that are not historical facts. These
forward-looking statements involve many risks and uncertainties that
could cause actual results to differ materially from those expressed or
implied by such statements, including, without limitation, possible
changes in market acceptance of our services, technological innovations
in the alarm monitoring industry, competitive issues, continued access
to capital on terms acceptable to Ascent, our ability to capitalize on
acquisition opportunities, general market and economic conditions and
changes in law and government regulations. These forward-looking
statements speak only as of the date of this press release, and Ascent
expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein
to reflect any change in Ascent's expectations with regard thereto or
any change in events, conditions or circumstances on which any such
statement is based. Please refer to the publicly filed documents of
Ascent, including the most recent Form 10-K for additional information
about Ascent and about the risks and uncertainties related to Ascent's
business which may affect the statements made in this press release.

About Ascent Capital Group, Inc.

Ascent Capital Group, Inc., (NASDAQ: ASCMA) is a holding company that
owns 100 percent of its operating subsidiary, Monitronics International
Inc. and certain former subsidiaries of Ascent Media Group, LLC.
Monitronics International, headquartered in Dallas, TX, is one of the
nation's largest, fastest-growing home security alarm monitoring
companies, providing security alarm monitoring services to more than
1,000,000 residential and commercial customers in the United States,
Canada and Puerto Rico through its network of nationwide, independent
Authorized Dealers. For more information, see http://ascentcapitalgroupinc.com/

About LiveWatch Security, LLC

LiveWatch Security®, a DIY home security system provider offering
smartphone-enabled alarm systems and home automation, has revolutionized
home security in America with its Plug & Protect® home security system
featuring the patented ASAPer® (As Soon As Possible Emergency Response)
service. Founded in 2002, LiveWatch is headquartered in Evanston, IL and
serves customers in all 50 states, Puerto Rico and Canada. LiveWatch
(including its e-Commerce division SafeMart) was honored with the 2014
Gold Stevie Award for Customer Service, 2013 Silver Stevie Award for
eCommerce Customer Service, and was recognized as an enterprise leader
by The Economist. For more information, please visit LiveWatch.com and SafeMart.com.

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

Amounts in thousands, except share amounts

As of December 31,

2014

2013

Assets

Current assets:

Cash and cash equivalents

$

12,612

$

44,701

Restricted cash

18

40

Marketable securities, at fair value

122,593

129,496

Trade receivables, net of allowance for doubtful accounts of $2,120
in 2014 and $1,937 in 2013

13,796

13,019

Deferred income tax assets, net

6,346

7,128

Income taxes receivable

—

7

Prepaid and other current assets

8,546

8,400

Assets held for sale

18,935

1,231

Total current assets

182,846

204,022

Property and equipment, net of accumulated depreciation of $30,030
in 2014 and $35,528 in 2013

36,010

56,528

Subscriber accounts, net of accumulated amortization of $736,824 in
2014 and $503,497 in 2013

1,373,630

1,340,954

Dealer network and other intangible assets, net of accumulated
amortization

Amortization of subscriber accounts, dealer network and other
intangible assets

253,403

208,760

163,468

Depreciation

10,145

8,941

8,404

Stock-based compensation

7,164

8,174

5,298

Deferred income tax expense (benefit)

(192

)

203

436

Gain on disposal of operating assets, net

(71

)

(5,473

)

(8,670

)

Unrealized gain on derivative financial instruments

—

—

(6,793

)

Refinancing expense

—

—

6,245

Long-term debt amortization

4,392

2,302

4,473

Loss on pension plan settlements

—

—

6,571

Impairment of assets held for sale

—

—

1,692

Other non-cash activity, net

12,242

11,028

9,066

Changes in assets and liabilities:

Trade receivables

(8,926

)

(8,165

)

(5,778

)

Prepaid expenses and other assets

62

8,638

(3,579

)

Payables and other liabilities

(5,862

)

(525

)

3,930

Operating activities from discontinued operations, net

(1,039

)

(50

)

(12,972

)

Net cash provided by operating activities

$

233,870

212,233

146,790

Cash flows from investing activities:

Capital expenditures

(7,769

)

(9,939

)

(6,076

)

Cost of subscriber accounts acquired

(268,160

)

(234,914

)

(304,665

)

Cash paid for acquisition, net of cash acquired

—

(478,738

)

—

Purchases of marketable securities

(4,603

)

(21,770

)

(99,667

)

Proceeds from sale of marketable securities

7,842

33,415

—

Decrease in restricted cash

22

2,600

55,963

Proceeds from the disposal of operating assets

241

12,886

17,280

Other investing activities

(436

)

(100

)

—

Net cash used in investing activities

$

(272,863

)

(696,560

)

(337,165

)

Cash flows from financing activities:

Proceeds from long-term debt

169,000

639,075

1,277,900

Payments on long-term debt

(127,166

)

(138,048

)

(1,133,387

)

Payments of financing costs

—

(11,136

)

(46,721

)

Stock option exercises

804

171

327

Purchases and retirement of common stock

(35,734

)

(33,436

)

(12,880

)

Bond hedge and warrant transactions, net

—

(6,107

)

—

Other financing activities

—

87

—

Net cash provided by financing activities

$

6,904

450,606

85,239

Net decrease in cash and cash equivalents

$

(32,089

)

(33,721

)

(105,136

)

Cash and cash equivalents at beginning of period

44,701

78,422

183,558

Cash and cash equivalents at end of period

$

12,612

44,701

78,422

Adjusted EBITDA

We evaluate the performance of our operations based on financial
measures such as revenue and "Adjusted EBITDA." Adjusted EBITDA is
defined as net income (loss) before interest expense, interest income,
income taxes, depreciation, amortization (including the amortization of
subscriber accounts, dealer network and other intangible assets),
realized and unrealized gain/(loss) on derivative instruments,
restructuring charges, stock-based compensation, and other non-cash or
non-recurring charges. Ascent Capital believes that Adjusted EBITDA is
an important indicator of the operational strength and performance of
its business, including the business' ability to fund its ongoing
acquisition of subscriber accounts, its capital expenditures and to
service its debt. In addition, this measure is used by management to
evaluate operating results and perform analytical comparisons and
identify strategies to improve performance. Adjusted EBITDA is also a
measure that is customarily used by financial analysts to evaluate the
financial performance of companies in the security alarm monitoring
industry and is one of the financial measures, subject to certain
adjustments, by which Monitronics' covenants are calculated under the
agreements governing their debt obligations. Adjusted EBITDA does not
represent cash flow from operations as defined by generally accepted
accounting principles ("GAAP"), should not be construed as an
alternative to net income or loss and is indicative neither of our
results of operations nor of cash flows available to fund all of our
cash needs. It is, however, a measurement that Ascent Capital believes
is useful to investors in analyzing its operating performance.
Accordingly, Adjusted EBITDA should be considered in addition to, but
not as a substitute for, net income, cash flow provided by operating
activities and other measures of financial performance prepared in
accordance with GAAP. Adjusted EBITDA is a non-GAAP financial measure.
As companies often define non-GAAP financial measures differently,
Adjusted EBITDA as calculated by Ascent Capital should not be compared
to any similarly titled measures reported by other companies.

The following table provides a reconciliation of Ascent Capital's total
Adjusted EBITDA to net loss from continuing operations (amounts in
thousands):

Three Months EndedDecember 31,

Twelve Months EndedDecember 31,

2014

2013

2014

2013

Total Adjusted EBITDA

$

88,934

86,291

$

354,805

304,474

Amortization of subscriber accounts, dealer

network and other intangible assets

(64,021

)

(62,701

)

(253,403

)

(208,760

)

Depreciation

(2,294

)

(2,581

)

(10,145

)

(8,941

)

Stock-based compensation

(2,023

)

(2,639

)

(7,164

)

(8,174

)

Restructuring charges

17

(709

)

(952

)

(1,111

)

Radio Conversion Program costs (a)

(312

)

—

(1,113

)

—

Security Networks acquisition related costs

—

—

—

(2,470

)

Security Networks integration related costs

—

(729

)

(2,182

)

(1,264

)

Interest income

1,048

936

3,590

3,752

Interest expense

(29,703

)

(29,186

)

(117,464

)

(95,836

)

Income tax benefit (expense) from continuing operations

1,787

(5,153

)

(3,420

)

(3,270

)

Net loss from continuing operations

$

(6,567

)

(16,471

)

$

(37,448

)

(21,600

)

_____________________________

(a)

Ascent's Adjusted EBITDA reported for the twelve months ended
December 31, 2014 has been adjusted to exclude Radio Conversion
Program costs of $441,000 and $360,000 for the three months ended
June 30, 2014 and September 30, 2014, respectively. These
adjustments will be reflected in future filings. No costs associated
with the Radio Conversion Program were incurred in 2013.

The following table provides a reconciliation of Monitronics' total
Adjusted EBITDA to net loss (amounts in thousands):

Three Months EndedDecember 31,

Twelve Months EndedDecember 31,

2014

2013

2014

2013

Total Adjusted EBITDA

$

90,752

87,778

$

362,227

305,250

Amortization of subscriber accounts, dealer

network and other intangible assets

(64,021

)

(62,701

)

(253,403

)

(208,760

)

Depreciation

(2,192

)

(2,208

)

(9,019

)

(7,327

)

Stock-based compensation

(661

)

(654

)

(2,068

)

(1,779

)

Restructuring charges

17

(709

)

(952

)

(1,111

)

Radio Conversion Program costs (a)

(312

)

—

(1,113

)

—

Security Networks acquisition related costs

—

—

—

(2,470

)

Security Networks integration related costs

—

(729

)

(2,182

)

(1,264

)

Interest expense

(30,203

)

(29,820

)

(119,607

)

(96,145

)

Income tax benefit (expense)

1,611

(5,098

)

(3,600

)

(3,081

)

Net loss

$

(5,009

)

(14,141

)

$

(29,717

)

(16,687

)

_______________________________

(a)

Monitronics Adjusted EBITDA reported for the twelve months ended
December 31, 2014 has been adjusted to exclude Radio Conversion
Program costs of $441,000 and $360,000 for the three months ended
June 30, 2014 and September 30, 2014, respectively. These
adjustments will be reflected in future filings. No costs associated
with the Radio Conversion Program were incurred in 2013.

_______________________________

1

Comparisons are year-over-year unless otherwise specified.

2

For a definition of Adjusted EBITDA and applicable reconciliations,
see the Appendix to this release. Ascent's net loss for the three
and twelve months ended December 31, 2014 totaled $6.6 million and
$37.8 million, respectively.

3

Monitronics' net loss for the three and twelve month periods totaled
$5.0 million and $29.7 million, respectively.